Email this article to a friend

Guy Hands has three deal regrets from his time as a private equity investor.

Alamy

Speaking at the London School of Economics Alternative Investments Conference on January 18, the founder and chairman of Terra Firma told an audience largely comprised of students that in his entire investment career, only three deals “didn’t end up where we wanted them to be”.

He attributed the failure of these deals to “not spotting and reacting to changes in the market quickly enough”.

The most notorious of the three was Terra Firma's highly leveraged buyout of music publisher EMI Group in 2007. Hands acquired EMI in a deal worth £4.5 billion but later saw the struggling group pass to creditors Citigroup. Terra Firma and its co-investors lost £1.75 billion on the deal.

The other two deals were the acquisitions of the off licence chain the Thresher Group in 2000 and Quadriga, a technology provider to the hotel sector, in 1998. Hands acquired Quadriga during his time managing money at Nomura International 's Principal Finance Group, which later spun out to become Terra Firma.

When talking about how he bounced back from setbacks, Hands said the most important factor was “about showing people that you are still in the game and that you still have confidence in what you do”.

Related

Success as an entrepreneur, he said, depends not on intellectual capability but on a “dedication and willingness to withstand pain”.

Terra Firma has struggled to attract investor money since its last fund – the €5.4 billion vehicle from which the EMI investment was made – was raised 2007. In February 2015, the firm announced it had €1 billion of capital to invest – more than half of which was Hands' own money.